inheritance

This article is based on the text of a address on Legal Rights for Foreigners in Norway, given by Attorney at Law Hans P. Bjerke at the January 1996 meeting. The information in this article was current as of January 1996. Changes may have occurred since then. This information is presented as informational only. Please be sure to contact competent legal assistance to answer your inheritance questions.

The first issue that will be addressed with she respect to inheritance law is the choice of law. I will also address the principles for distribution of the estate according to Norwegian law and the rules pertaining to wills. The right of the surviving spouse to retain an undivided possession of the estate is in may cases just as important as the inheritance right. I will therefore also address this right later on. Finally, the question of inheritance tax will be addressed.

The choice of law issue arises as a consequence of the deceased person’s connection to two or more countries. She may be an American citizen living in Norway, with relatives and property in Norway and even in one or more additional countries. In cases like this, the application of the inheritance law of the various countries may lead to a different distribution of the deceased’ estate, or his will may be invalid in some countries, but not in others. The choice of law issue may be invalid in some countries, but not in others. The choice of law issue may therefore be decisive for he inheritance rights.

According to Norwegian inheritance law, the estate of a deceased person shall be distributed according to the law of the country where she resided at the time of death. Hence, Norwegian law will apply to the distribution of the estate of Americans living in Norway at the time of their deaths.

The distribution of a deceased person’s estate depends on whether or not she had made a will. If there is no will, then the estate will be distributed to the relatives and the spouse according to the Inheritance Act. The parties are, however, free to agree on a distribution at deviates from the act, but if such an agreement cannot be reached, the act will apply.

When no will has been made

Let us look at the distribution in cases where there is no will. The inheritance rights of the spouse are stipulated in #6 of the Inheritance Act. According to this regulation, the spouse’s share of the estate is dependent on the next of kin to the deceased person. If the deceased person had any descendants, then the spouse will inherit the greater part of 174 of the estate of 4 G, which is equal to approximately NOK 155,000. If the deceased person’s closest relatives her his parents or their children, then his spouse will inherit the greater part of 50% of the estate, or 6 G, which is equal to approximately NOK 235,000. Finally, if the deceased person’s closest relatives were his grandparents or their children, then the spouse will inherit the entire estate.

The part of the estate not distributed to the spouse pursuant to # 6 shall be distributed to the deceased person’s relatives. The Inheritance Act divides the deceased person’s relatives into three different classes. The first class consists of the deceased person’s descendants, the second class consists of his parents and their descendants, and the third class consists of the grandparents and their children and grandchildren.

Distribution of the estate

The distribution of the estate between the different classes is simple. As long as there is any person alive in class one, the estate shall be distributed only among the persons in this class. If there is no person alive within class one, then the estate shall be distributed among the persons in class two. The estate shall be distributed only among the persons in class two. The estate shall be distributed among the persons in class three only if there are no persons alive within class numbers one and two.

The distribution of the estate within in each class is regulated in chapter one of the Inheritance Act. If the deceased person had descendants, then his children will inherit equal shares of the estate. If one or more of his children are dead, then the deceased child’s share will be distributed with equal shares to his children and so on.

If the deceased person did not have any descendants, then the estate will be distributed to his parents with an equal share to each parent. If one or both of the parents are dead, then their respective shares will be distributed with equal shares to their children, and so on. If both parents and their descendants are dead then the estate will be distributed with equal shares to each of his grandparents or, in the case they are dead, to their children and grandchildren.

If the deceased person did not have a spouse or relatives within classes one, two or three, then the state (Norway) will inherit the estate.

When the deceased has made a will

If a person wishes to deviate from the distribution that follows from the Inheritance Act, then he may do so to a certain extent by making a will, provided that she over 10 years of age and is mentally fit to make a will. When a person had decided to make a will, she must be aware of two sets of rules: first, the right of his spouse and descendants to receive a certain inheritance and, second, the formal requirements for establishing a valid will.

The descendants can only to a certain extent be deprived of their inheritance in the deceased person’s will.  According to #29 of the Inheritance Act, the descendants are always entitled to inherit 2/3 of the estate, limited to NOK 1,000,000 to each child. If a child is dead, then the grandchildren and great grandchildren, etc. shall nevertheless inherit at least 200,000 each.

In addition to the protection of the descendants, the inheritance Act also protects the rights of the spouse by determining that her right to inherit 4 or 6 G, as the case may be, cannot be limited in a will.  Hence, a person with children will only be entitled to decide over 173 of his estate in a will, unless the estate is quite large. A married person cannot make a valid will if his estate is less than 4 or 6 G. If the estate is small, then the spouse has a legal right to inherit the entire estate.

Formal requirements of a will

With regard to the form of the will #49 of the Inheritance Act states that the will must be in writing and signed in the presence of two witnesses who shall also sign the document. The witnesses must know that the document in question is a will, but they do not need to know the content of the will, and they cannot be named as beneficiaries in the will. Breach of these rules will normally render the will invalid.

According to #54 of the Inheritance Act, a will is nevertheless valid if it complies with the formal requirements of the law of the country where it was made.  It will also be valid if it complies with the law of the country of which the deceased person was a citizen or resident at the time the will was made or when she died. Furthermore, a will that limits the inheritance of a spouse is not valid unless the spouse has been informed about the will. In order to secure evidence of the fact that the spouse has been informed, he or she would confirm this in writing.

The Inheritance Act does not require that the will be written in Norwegian, so a person is free to make the will in any language.  There are no registration requirements for wills, but they may be filed with the courts of Law. The purpose of the filing is to ensure that the will is found after the person’s death.

The distribution of the estate is very often compacted by the fact that the parties involved disagree on the distribution of certain things. Unless an agreement can be reached, then the law states that the assets will be sold and the proceeds distributed. In order to prevent this conflict among relatives, the distribution of certain items may be decided in a will, but only to extent that this does not interfere with the rules of minimum inheritance.

For the surviving spouse the right to retain an undivided possession of the estate will often be of greater economic importance than the inheritance. This right gives the surviving spouse the right to retain the entire estate and, by and large, to use it as she sees fit until her death.  There are, however, some restrictions on use of the undivided estate, and the spouse cannot remarry before the estate is distributed.

The administration and distribution of the deceased person’s estate may either be carried out by the beneficiaries themselves or be left to the court, which normally will appoint an administrator. If the beneficiaries choose to take care of the estate themselves, the law requires that at least one of them assume responsibility for any and all liabilities of the deceased person.  This is, of course, a risky undertaking, as it is impossible to be 100% certain with respect to the liabilities of another person. The risk nay, however, be eliminated by the posting of a public notice stating that all claims against the estate will be null and void unless reported within a certain time. If the administration and the distribution are left with the court, then the beneficiaries do not assume liability for the deceased person’s debts.

A cohabitant will to inherit any part of the deceased person’s estate, unless he is named a beneficiary in a will. Neither will he have the right to retain an undivided possession of the estate. In order to secure the future for each other in case of the cohabitant’s death, it is strongly recommended that cohabitants establish wills and name each other as beneficiaries. If not, the deceased cohabitant’s relatives will inherit the entire estate, and the cohabitant may be left without sufficient means. A good alternative, or perhaps a supplement, to naming each other as beneficiaries in wills, is to name the cohabitant as the beneficiary in a life insurance policy.

Inheritance tax

According to the income tax act, inheritance is not taxable as income. Inheritance is nevertheless taxable by the inheritance tax act.  The tax rate varies from 0 to 30%, depending on the amount in question and the deceased person’s relationship to the beneficiary.

If the deceased person was a foreigner who lived abroad when she died, then the part of the estate distributed to Norwegians or Norwegian residents will, as a main rule, not be subject to Norwegian inheritance tax, provided that the inheritance does not consist of real estate or a business in Norway.  Finally, one should be aware of the fact that there is a treaty between Norway and the United States regarding inheritance tax.  The purpose of this treaty is to prevent double taxation by obligating each country to give credit for inheritance tax paid in the other country.